TRAI recommendation to impose fine on Vodafone challenged in Delhi HC

TRAI recommendation to impose fine on Vodafone challenged in Delhi HC
TRAI recommendation to impose fine on Vodafone challenged in Delhi HC

Telecom major Vodafone today told the Delhi High Court that the Telecom Regulatory Authority of India’s recommendation to the Centre to impose Rs 1050 crore penalty on it for not giving interconnectivity to Reliance Jio was an “arbitrary” decision.

TRAI has recommended imposition of a fine of Rs 50 crore for each of the 21 circles of Vodafone, except in Jammu and Kashmir, coming to a total of Rs 1050 crore.

Justice Sanjeev Sachdeva did not pass any orders after TRAI’s lawyers sought time till December 19 to take instructions on the steps taken by the authority after it issued a show cause notice to Vodafone on September 27.

Vodafone has claimed that the entire process adopted by TRAI was “arbitrary” as Reliance announced Jio offer on September 5-6 and had thereafter made payment for “augmentation of interconnection links” on September 25 after which there was a 90-day period to provide interconnectivity.

Senior advocate Meet Malhotra and central government standing counsel Kirtiman Singh, appearing for TRAI, sought time for instructions after the court asked how the September 30 meeting of TRAI with all operators was held before expiry of 10 days given to Vodafone to reply to the show cause notice.

“In these circumstances, how can even the findings be sustained,” it asked and added that once a recommendation was made it could cloud judgement of decision-taking authority.

Vodafone, represented by senior advocate Rajiv Nayar, contended that it had time till December end this year for providing interconnectivity to Jio and even before expiry of the period it has provided 10,000 connections.

During arguments, Nayar said TRAI did not have the power to recommend imposition of penalty and it can only recommend revocation of licence for breach of licence conditions and sought setting aside of the recommendation.

He argued that TRAI has the power to impose “financial disincentives” for breach of Quality of Service regulations and to ensure compliance of terms and conditions of licence.

Vodafone has also said that no proper hearing was given to it by TRAI before issuance of recommendation of October 21.

The court will hear the matter again on December 21.

TRAI, in its recommendation to the DoT, had said it has found Vodafone to be non-compliant with licence conditions and service quality norms given the high rate of call failures and congestion at interconnect points for RJio.

( Source – PTI )

Vodafone challenges spl audit order: Delhi HC seeks reply

Vodafone challenges spl audit order: Delhi HC seeks reply
Vodafone challenges spl audit order: Delhi HC seeks reply

Delhi High Court today sought the Income Tax department’s response on Vodafone’s plea challenging an order directing special audit of its accounts for assessment year 2012-13.

A bench of Justices S Muralidhar and Vibhu Bakhru issued notice to the IT department and asked it to file its reply by July 28 on Vodafone’s plea.

The telecom major has challenged the department’s March 31 order directing special audit of its accounts for the assessment year 2012-13.

It alleged before the court that the order has been passed to “buy more time”.

Advocate Zoheb Hossain, appearing for the department, refuted the allegation.

The company had earlier moved the high court in March this year challenging the department’s show cause notice to it on why special audit be not carried out.

The plea was later disposed of by the court after the company agreed to file a reply to the show cause notice of March 11.

Vodafone had made the submission two days after the court, in a subtle warning, had told the company that it would be taking a risk if it did not file a reply to the IT department’s show cause notice.

The government had earlier told the court that by not responding to the notice, the company was trying to delay the assessment process beyond the March 31 deadline.

In its notice, the department had asked the company to show cause why its 2011-12 financial records should not be subjected to special audit to arrive at the total income for assessment year 2012-13.

In its show cause notice, the department had said that “during course of assessment proceeding, the information and details asked vide various questionnaire have not been submitted till date and you yourself submitting the reasons that due to extreme voluminous of records the specific information cannot be furnished or requesting to grant some more time to furnish details which itself is concrete evidence that records of assessee are voluminous and accordingly need thorough investigation by special audit.

( Source – PTI )

Will file reply to IT dept show cause notice: Vodafone to HC

VodafoneNew Delhi, Vodafone today told Delhi High Court that it will file a reply by Friday to the income tax department’s show cause notice asking the company why its 2011-12 financial records should not be subjected to a special audit.

Vodafone’s submission came two days after the court, in a subtle warning, told the company that it would be taking a risk if it did not file a reply to the IT department’s show cause notice of March 11.

In view of the submission by Vodafone today, a bench of justices S Muralidhar and Vibhu Bakhru disposed of the company’s plea challenging the show cause notice.

While disposing of the petition, the bench said that questions of law raised in the plea are left open.

Vodafone also submitted that if aggrieved by the order passed by the IT department, it will approach the court.

The government had earlier told the court that by not responding to the show cause notice, the company was trying to delay the assessment process beyond the March 31 deadline.

In its notice, the department had asked the company to show cause why its 2011-12 financial records should not be subjected to special audit to arrive at the total income for assessment year 2012-13.

In its plea challenging this notice, Vodafone has also challenged the amendment to section 142(2A) of IT Act that says the assessing officer can seek a special audit in certain circumstances.

In its show cause notice, the IT department had said, “during course of assessment proceeding, the information and details asked vide various questionnaire have not been submitted till date and you yourself submitting the reasons that due to extreme voluminous of records the specific information cannot be furnished or requesting to grant some more time to furnish details which itself is concrete evidence that records of assessee are voluminous and accordingly need thorough investigation by special audit

Delhi HC quashes IT notices to Vodafone, TTSL

Delhi HC quashes IT notices to Vodafone, TTSL
Delhi HC quashes IT notices to Vodafone, TTSL

The Delhi High Court today set aside notices issued by the Income Tax department to Vodafone Essar Mobile Services Ltd (VEMSL) and Tata Teleservices Ltd (TTSL) to initiate proceedings to declare them as TDS defaulters for assessment years 2003-04, 2004-05 and 2005-06.

The department had initiated proceedings against Vodafone and TTSL in 2011 on the ground that the companies had allegedly failed to deduct tax deducted at source (TDS) for those assessment years.

The department was of the view that as per a 2009 amendment in the tax law, it can initiate proceedings under the Income Tax Act for treating an assessee as a defaulter even in respect of alleged failure to deduct TDS for a period more than four years earlier to March 31, 2011.

Disagreeing with the departments stand, a bench of justices S Muralidhar and Vibhu Bakhru said under the amended provisions of the Act the government cannot initiate proceedings against a company for failing to deduct TDS four years prior to March 31, 2011.

Referring to a circular issued by Central Board of Direct Taxes (CBDT) regarding the amended provision, the bench said the amendment was “meant to expand time limit for completing proceedings and passing orders in relation to pending cases”.

“The said proviso (introduced by the amendment) cannot be interpreted, as is sought to be done by the department, to enable it to initiate proceedings for declaring an assessee to be an assessee in default under section 201 of the Act for a period earlier than four years prior to March 31, 2011,” it said.

“Accordingly, insofar as the notices for assessment years 2003-2004, 2004-2005 and 2005-2006 are concerned, they are held to be unsustainable in law on the interpretation of section 201(3) of the Act by the court.

“Consequently, the notices impugned in the present petitions issued by the Department seeking to initiate proceedings against the petitioners (Vodafone and TTSL) for declaring them to be assessees in default under Section 201(3) of the Act are hereby quashed,” the bench added.

( Source – PTI )

“Don’t effect fresh demand against Voda for 2011-12”

"Don't effect fresh demand against Voda for 2011-12"
“Don’t effect fresh demand against Voda for 2011-12”

The Delhi High Court on Friday instructed the income-tax (I-T) department not to give effect to any fresh assessment against Vodafone for assessment year 2011-12 till February 18, when the British telco’s plea against a dispute resolution panel’s decision to disallow exemptions amounting to Rs 2,800 crore would be taken up.

The dispute resolution panel (DRP), an alternative dispute resolution mechanism formed under the Income Tax Act, had disallowed exemptions sought by Vodafone under various heads, including network site rentals, annual licence fee, unaccounted income, depreciation on 3G spectrum and transfer pricing adjustments on advertisements and marketing expenses.

It had also referred the matter back to an assessing officer (AO), who in March 2015 had passed a draft assessment order, disallowing the exemptions sought by Vodafone.

A High Court bench of judges Badar Durrez Ahmed and Sanjeev Sachdeva had last week allowed the AO to pass the assessment order, but asked him not to give effect to it till the next date of hearing on February 18. I-T officials, however, said the high court’s direction was not a setback for the government. “One should not read too much into the development as it is more of a stay order. The final verdict is yet to come,” said a senior government official who did not wish to be named.

The court also issued a notice to the Centre, DRP and the I-T department and sought their replies on Vodafone’s plea, which alleged the panel’s November 16 order disallowing the exemptions was “illegal and arbitrary” and contrary to provisions of the I-T Act.

The draft order was challenged by the company before the DRP, which on November 16 disallowed the objections and remanded back the matter back to the AO, the petition filed by Vodafone said.

The telecom major has contended that the panel, while disallowing the objections, had said the proposed addition of Rs 2,800 crore should be made to its taxable income for assessment year 2011-12.

According to the company, the panel gave no reasons for dismissing the objections.“Huge additions have been proposed solely on a complete and prima-facie non-application of mind,” Vodafone said in its plea against the DRP order.

( Source – PTI )

Vodafone challenges TRAI”s interconnect norms

Vodafone challenges TRAI''s interconnect norms
Vodafone challenges TRAI”s interconnect norms

Telecom major Vodafone Mobile Service Ltd and its group companies today moved the Delhi High Court challenging TRAI’s Telecommunication Interconnect Usage Charges Regulations, 2015 by which it has fixed termination charges for wireline to wireless as zero paise and wireless to wireless to Rs 0.14 per minute.

Interconnection Usage Charges (IUC) or termination charges are payable by one telco, whose subscriber makes a call, to another whose subscriber receives the call. The charge is payable by the first for using the second’s network.

A bench, comprising Chief Justice G Rohini and Justice Rajiv Sahai Endlaw, declined to give any interim relief to the telecom major saying Telecom Regulatory Authority ofIndia (TRAI) has to be heard and also because the regulations came in February, 2015.

The bench asked TRAI to file its reply in four weeks and posted the matter for further hearing on January 19, 2016.

During the brief hearing, senior advocate K Viswanathan, appearing for Vodafone, said the regulations are illegal, bad in fact and in law, arbitrary and in gross violation of the principles of natural justice, beyond the functions of TRAI.

He said the February 23, 2015 regulations–Mobile Termination Charges (MTC) and Fixed Termination Charges (FTC) under IUC Regulation–were “ultra vires TRAI Act and were contrary to the object and purpose of its provisions to the extent that it arbitrarily and in a non-transparent manner fixes the termination charges”.

Viswanathan said that it is clear that the fixation of terms of interconnectivity which includes the termination charge by TRAI cannot be zero where costs are incurred by the terminating operator and therefore, the regulations fixing the charge as zero is ultra vires the provisions of TRAI Act.

He said that TRAI itself has stated in its 2001 Regulations that the interconnection charges shall be fixed on cost basis to provide recompense to the operators for work done for termination of calls on their network.

He further submitted that TRAI, while agreeing that costs are incurred for terminating a call, has grossly erred and acted in an illegal manner and contrary to the provisions while fixing the termination charges for wireline to wireless as zero and wireless to wireless from Rs 0.20 per minute To Rs 0.14 per minute.

( Source – PTI )

Consumer forum orders Vodafone to pay compensation to doctor

Holding Vodafone India guilty of deficiency in service, Maharashtra State Consumer Disputes Redressal Forum has upheld a lower court order which asked the service provider to pay Rs 20,000 compensation and Rs 5,000 costs to a doctor for failing to stop unsolicited commercial communications.

“Vodafone had failed to discharge its obligation and acted with imperfection, shortcoming or inadequacy in the nature and manner of purpose, which is required to be maintained by it under the regulations,” observed S R Khanzode and Dhanraj Khamatkar in their order yesterday.

“Thus, deficiency in service within the meaning of section 2(1)(g) of the Act is well established as against Vodofone,” the forum members further said while dismissing an appeal filed by Vodofone against the consumer court judgement.

Dr Ashish Gala, who practices in suburban Mulund, had registered with Vodofone on the “Do not Call list”. Yet, he got calls from various companies following which he filed a complaint with the service provider on August 30, 2008, saying Vodofone should have ensured that he did not get the calls.

Vodofone argued that it was not deficient in service as under Telecom and Solicited Commercial Communications Regulations, 2007, there is no positive obligation on them to stop unsolicited commercial calls.

In fact, Vodofone said, Telephone Regulatory Authority of India did not contemplate and acknowledge the fact that such communication or unsolicited communication calls cannot be stopped entirely.

Vodofone further contended that as per explanatory memorandum issued to clause 16 of the Regulations, 15 days time is provided for a subscriber for making the complaint to his service provider in respect of unsolicited commercial communications. However, the complainant, Dr Gala, had failed to make any such complaint within a fortnight.

 

PTI

Telecom scam:CBI chided for not naming firms’ execs

Delhi High court has grilled the CBI for only “blaming” government servants and not naming any company officials in connection with the charge sheet against Airtel, Vodafone and others for alleged irregularities in the allocation of additional spectrum to them during the NDA regime

“In a conspiracy, there must be two parties. You (CBI)are blaming only the government servants. Why not the private persons? Who did the conspiracy with the government servants?” special CBI judge OP Saini asked.

On being quizzed by the judge, CBI prosecutor KK Goyal said they had tried their best to find out if any company officials were part of the conspiracy but they could not find anybody’s name.

“We could not find out anybody’s name. We tried to find out who are the persons who instigated this but we could not find out. We tried our best,” the prosecutor said.

The court, after hearing CBI’s arguments, reserved its order for March 19 on the issue of taking cognisance of the charge sheet.

During the hearing, CBI told the court that no resolution was passed by these companies for applying for additional spectrum.

The court had earlier directed the CBI to place before it documents relating to resolution passed by the three firms, including Airtel and Vodafone, for seeking additional spectrum during the NDA regime.

The CBI had on December 21 last year filed a charge sheet in which former telecom secretary Shyamal Ghosh and three telecom firms – Bharti Cellular Ltd, Hutchison Max Pvt Ltd (now known as Vodafone India Ltd) and Sterling Cellular Ltd (now known as Vodafone Mobile Service Ltd) – have been named as accused.

In the 57-page charge sheet, the CBI has booked all the accused for the offences of criminal conspiracy (120-B) of the IPC and under provisions of the Prevention of Corruption Act.

The court had earlier granted over two weeks additional time to CBI to submit documents sought from it in the case.

The court had told the CBI that these telecom firms must have approached the government first for seeking additional spectrum and they must have also passed a resolution in this regard.

It had also told CBI that the case is about the pricing dispute over additional spectrum and the agency should file the documents relating to passing of any such resolution by these companies.

The CBI, in its charge sheet, has named the three telecom companies as accused in the case in which DoT had allegedly allocated additional spectrum resulting in a loss of Rs. 846 crore to the exchequer.

The CBI has not named Jagdish Rai Gupta, a former deputy director general (VAS) cell of DoT and a former director of BSNL, who figured in the FIR, as accused in the case saying “no evidence attributing any criminality on his part or his involvement in the alleged offence has surfaced during the investigation.”

Regarding Ghosh, the CBI had said that in conspiracy with the then telecom minister Pramod Mahajan and the accused telecom firms, he abused his official position to show undue favour to the firms causing a loss of Rs. 846.44 crore to the exchequer.

The CBI, in its charge sheet, had said that the decision regarding allocation of additional spectrum to these telecom firms was taken in “undue haste” in pursuance of the conspiracy hatched by Mahajan, Ghosh and these companies.

Mobile cos tell court they can’t provide call records

The special Maharashtra Control of Organised Crime Act Court has been told by the Tata Teleservices (Maharashtra) that it cannot provide call data records (CDR) to the accused of 2006 Mumbai train blasts case free.

The company told the court that its accumulated losses as of May 31, 2012 were Rs 3031.18 crore.

“If the cost of retrieving the CDRs is not allowed to be recovered, then the company which is already incurring huge losses, and ultimately its more than 4.5 lakh shareholders, would have to bear this cost,” said Prashant Padvale, the assistant manager, in an application.

Earlier four mobile service providers — Vodafone, Loop, Airtel and Tata — had filed application in the court seeking direction to the accused to pay a total of Rs 34 lakh for retrieving the CDRs.

But the defence lawyers said their clients would not be able to shell out the money, and it would not be in the interests of justice. As the prosecution was relying on CDRs, the defence must get them free, they argued.

Loop also filed an application today saying it is unable to bear the estimated cost of Rs 8 lakh for retrieving CDRs.

Earlier, the MCOCA court had rejected the demand of CDRs. When the accused moved the High Court, it directed the lower court to consider the demand afresh.

Seven coordinated blasts on Mumbai suburban trains on July 11, 2006 killed 188 people and injured 817 others. While ATS has arrested 13 persons, 15 accused are absconding.

Decision on telecom licences renewal in two weeks, court told

Delhi High Court has been informed by the central government that it will decide the applications of renewal of licences of telecom service providers Vodafone, Bharti Airtel and Loop Telecom within two weeks.

Justice Rajiv Shakdher, accepting the submissions of Additional Solicitor General (ASG) A.S. Chandhiok that the applications will be decided as per the law, disposed of the petitions and said that detailed order will be passed later in the day.

Leading telecom service providers Vodafone, Bharti Airtel and Loop Telecom have moved the high court challenging telecom department’s move to put for auction 900 MHz spectrum despite their applications for licence extension pending with the department.

The companies had in December last year sought extension of their licence period for Delhi, Mumbai and Kolkata circles, which are coming up for renewal in November 2014.

The three service providers hold spectrum in the 900 MHz band, which the department of telecommunications plans to auction along with auction of 1,800 and 800 MHz beginning March 11.

The telecom operator has sought the extension under clause 4.1 of the licence agreement under which the government can extend the period of licence by 10 years at one time if the request is made by the operator during the 19th year of the licence period.

The companies moved the court after the Supreme Court last week said that auction of 900 MHz spectrum was not part of its Feb 2, 2012 order and companies are free to challenge it before any court of law

 

PTI